Despite the UK only being in lockdown for seven working days of Q1, the country has seen the biggest economic contraction since the 2008 financial crisis, with things set to get much worse in Q2. This is a common picture across all global economies, as certain industries have been temporarily halted.
In any recession, recruitment is often an early indicator of what is to come. Companies put off hiring until uncertainties decrease. However, they don’t necessarily wait for financials to improve – they hire based on what they project their future financials to be. So are there any interesting early signs from what we’re seeing in recruitment across strategy, insights and commercial roles?
(1) It’s more a question of when, not if, hiring resumes:
As expected, many companies introduced hiring freezes and put processes on hold when the pandemic initially struck; however, very few were suggesting they were going to stop hiring altogether – it was more a question of “when” and not “if”.
This indicates companies are still expecting a relatively fast recovery to at least 90% levels. Businesses have been paralysed by the lack of certainty, not wanting to make decisions which could turn out to be mistakes, but most will still be financially healthy enough to begin hiring in earnest when timelines become clearer. We are therefore anticipating a spike in hiring as opposed to a slow return to normal volumes, as the impact of coronavirus lessens and lots of roles are taken off “hold”. Whilst it might not be quite a “V-shaped” recovery, businesses are certainly not expecting an “L-shaped” one.
(2) Very uneven impact across industries:
Although the economy has seen a drastic fall overall, with 14% contraction forecast for 2020, some industries have fared better than others.
Travel and hospitality are some of the worst-affected sectors, along with non-food and non-pharmaceutical retail. Companies in these sectors are the few that have had to completely stop hiring, likely until the end of the year for some of those we’ve spoken to. However, there will be light at the end of the tunnel for those who make it through, as the millions of people who have been confined to their homes throughout lockdown look to go out and enjoy themselves as restrictions are eased.
Other businesses, especially ones that can operate online or provide essential services in the fight against COVID-19, have been less affected by the confinement. For example, we’ve found eCommerce and healthcare companies have been hiring in earnest, as they expect behaviours to have been permanently changed.
The virus has had a mixed impact on charities, with many left reeling and stopping hiring across the board, whilst others have experienced increased prominence and donations. Overall, they have seen a 48% decline in voluntary funding, whilst simultaneously managing an increased demand to support those most badly affected. In order to do our part in supporting these institutions, we’ve been placing pro bono freelancers, free of charge, into companies directly supporting our communities during the pandemic. We expect charities to make a healthy recovery once the worst of the pandemic is over, given a renewed appreciation for their value, but would encourage you to get in touch if you know of any projects we could help to staff.
(3) We’ve seen resilience from the biggest and smallest companies; the middle have been hit hardest:
The impact of coronavirus has also not been even across the different sizes of business. We’re increasingly seeing the largest corporates and smallest, most nimble start-ups, having most resilience to this shock.
It’s understandable that large corporates, with plenty of cash on balance sheets, have been able to protect themselves. Many are able to benefit from the crisis, by actively pushing hiring, finding great talent and setting the business on the right trajectory over the longer-term.
Perhaps more surprisingly, small, agile businesses are also still able to grow as long as they’re not in the worst hit industries, since they have been able to make decisions and adapt much more quickly. Given lower overheads, they are also able to substantially grow market share as people look to more cost-effective alternatives.
(4) There’s great talent getting more time to have their interest piqued
The companies that are in a more resilient position have found now is a great time to be recruiting. On Movemeon, we have twice beaten our records of the number of active candidates and the volume of applications within a week. So there is clearly more talent supply in the market.
What is potentially even more interesting is that we are seeing a lot more activity from people currently in jobs. This is likely a result of increased opportunity for reflection at home, allowing people time to think about their options and to look at what else is out there.
(5) Companies turning to the flexibility of freelance
The uncertainty of this period has meant that companies of all sizes, in many industries, have had an almost impossible task in predicting what the future of their businesses will look like. Decision-makers haven’t wanted to commit to permanent hires to fill gaps and have instead turned to hiring freelancers, who can fill a need without the risk. This is evidenced by the 43% increase in the number of freelance roles posted on movemeon.com in March & April compared to the same period last year. We’ve already seen a trend towards hiring freelancers over the last few years, but we expect this trend to accelerate over the coming months.
It’s unsurprising the hiring picture is very uneven across industries; the controls on how people interact socially will not impact all companies equally. What is more interesting is two-fold:
- The fact that companies expect to resume normal service sooner rather than later. This suggests that while a V-shaped recovery is extremely unlikely, the economic scarring might not be as severe as many fear.
- Companies that can, are using this period to attract great talent and set themselves up well for the next period of growth. Companies in good financial positions, or industries that have been less impacted, are acting before financials have started to improve, so they get first mover advantage on the available talent.
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